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POMPANO BEACH – Following inaction by the Florida
legislature on an amendment that would have addressed the state’s legal
liability and a subsequent Florida Supreme Court ruling dealing with the
Department of Transportation’s railroad crossing indemnity clause, a
collaboration between Tri-Rail and All Aboard Florida that would bring commuter
rail service from Miami to Orlando may soon be full-speed ahead.

Two agencies have already signed on to the project, and three
were still required to vote, with those votes scheduled to take place during
the week of May 23. If those agencies grant
their approval, the project should be able to move forward, a source familiar
with the project told the Florida Record.

The South Florida Regional Transportation Authority (SFRTA),
which oversees Tri-Rail, was also expected to vote on portions of the project on May 27.

Requests for an update on the votes and the overall status
of the project went unanswered.

Since the legislature declined to enact the necessary
amendments in March, the Florida Department of Transportation could not release
$20 million it had pledged for a 4-mile publicly funded portion of the
project. Tri-Rail said in documents related to a proposal for alternate funding
that the Florida Department of Transportation is unwilling to move forward with
any commitments to the Downtown Miami Link.

Without the capital funds needed to complete track
improvements and purchase an easement, and without indemnification required by
All Aboard Florida and Florida East Coast Railway (FECR), All Aboard Florida
indicated that it was unwilling to proceed with completion of Tri-Rail’s
portion of the Miami Central Station in light of the time constraints it faces
for completing construction of the entire station.

As a result, at its April 22 meeting, SFRTA delegated Commissioner Steve Abrams to negotiate with All Aboard Florida and Florida East
Coast Railway in connection with a new proposal for the downtown Miami link
proposal.

According to documents included with the SFRTA meeting
agenda, the “project requires up to $20.3 million of capital funds plus
interest payments to be committed in SFRTA’s five-year capital budget,
impacting other SFRTA project commitments with local capital infrastructure
funds.” Operations and maintenance costs are estimated to be between $2.1 million and
$2.3 million per year.

Under the plan, Tri-Rail would obtain a loan of up to $20.3
million for capital improvements that would be secured by county capital
infrastructure dollars. In addition, Tri-Rail would agree to indemnify All
Aboard Florida and Florida East Coast Railway in connection with its operations
on the FECR corridor/viaduct by either agreeing to an indemnification based on
a statutory amendment that would be pursued by Tri-Rail in the 2017 session of
the Florida legislature or agreeing to an indemnification based on a recent
decision of the Florida Supreme Court in the case titled Department of Transportation v. Schwefringhaus.

In that ruling, the Florida Supreme Court ruled that “when
the state is statutorily authorized to enter into a contract, that authority
includes the obligation to fulfill all terms of that contract, including
provisions indemnifying private parties. The department had previously argued
that it could not indemnify a private party absent explicit statutory authority
to do so. The court also ruled that the department’s liability under a contract
is not limited by Florida’s sovereign immunity statute.

“Under SFRTA’s authority to contract under Chap. 343,
Florida Statutes, SFRTA may now agree to indemnify private parties when it is
obligated to do so by contract,” the proposal documents said.

In either of the two indemnification scenarios, Tri-Rail said
it would also provide an insurance program with $295 million in tort liability
coverage for the Tri-Rail Downtown Miami Link Service that is separate from an
insurance program maintained in conjunction with the Department of
Transportation, at an estimated annual premium cost of $1 million. Tri-Rail
would also establish a $5 million self-insurance retention fund, and All Aboard
Florida and FECR would both be covered under the new insurance program.

In connection with the proposal, Tri-Rail said revenue
agreements with various Miami-Dade government entities that were already
approved by the SFRTA board would need to be amended because they are all based
on the department’s participation in the Tri-Rail Downtown Miami Link project.

The project is privately funded, except for the areas where
a new piece of track needs to be constructed to allow the existing tracks to
link up. That 4-mile section of the project is where the state funding was
needed.

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